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One in three cigarettes smoked in Ontario is illegal

Highlights
- 22 per cent of cigarettes smoked in Canada are illegal - up from
16.5 percent in 2006 or a 30 percent increase.
- 31.6 per cent of cigarettes smoked in Ontario are illegal - up from
23.5 percent in 2006 or a 35 percent increase.
- Ontario accounts for 55.5 per cent of illegal smokers and 53.8 per cent
of illegal cigarettes in Canada.
MONTREAL, Aug. 2 /CNW Telbec/ - Illegal cigarette sales continue to tear
through the Canadian economy. A new study commissioned by the Canadian Tobacco
Manufacturers Council (CTMC) indicates that nationally, 22 per cent of
cigarettes purchased are illegal, up from 16.5 per cent in 2006. In Ontario,
31.6 percent of the cigarettes purchased are illegal, up from 23.5 per cent in
2006.
"This is one of the most robust studies on the illegal cigarette issue
and it clearly shows that this problem is not going away," said John Barnett,
president of the Canadian Tobacco Manufacturers Council and Rothmans, Benson
and Hedges Inc. "Last year the study confirmed the scope of the problem. This
year the study clearly demonstrates that the problem is growing and
spreading."
The majority (94.9 per cent) of illegal cigarette volume is concentrated
in Quebec and Ontario. Ontario accounts for 53.8 per cent of the total illegal
volume.
"Illegal cigarettes are not regulated as are the cigarettes produced by
CTMC member companies. They do not have the same health warnings. There is no
control on whether or not the information on the pack, when there is actually
information given, is the correct information. There is no control on
ingredients," said Benjamin Kemball, president of Imperial Tobacco Canada.
"Often they are sold loose in plastic bags with no information or health
warnings."
The CTMC estimates that governments are losing approximately $1.6 billion
per year in tax revenues. The Ontario government alone is losing $449 million.
"It has become very easy, and is becoming easier all the time to obtain
illegal cigarettes in Canada," said Mr. Kemball. "Everyone is impacted. The
networks that traffic in illegal cigarettes are not limiting themselves to
tobacco. They are trafficking in drugs, alcohol and firearms. And you can be
guaranteed that these individuals are not asking for proof-of-age when they
are selling cigarettes."
"Retailers, large and small, are hit hard by illicit trade. In addition
to lost customers, the illegal tobacco market costs retailers an average of
$120,000 in lost sales per year," said Michel Poirier, president of
JTI-Macdonald Corp. Small retailers can't compete with cheap, illegal tobacco
and if the current trend continues we will see many family-run stores closing
their doors for good."
Conducted by GfK Research Dynamics, the study's objectives were to
establish the incidence and relative share of illegal tailor-made cigarettes
in Canada as well as to understand consumer awareness and purchase patterns of
illegal trade. The sample size was 2,057 Canadians distributed across the
country between May and June 2007. The level of confidence around the reported
figures is +/- 2.2 per cent for the national results.
The study was commissioned and paid for by Canada's three largest tobacco
manufacturers (Imperial Tobacco Canada, Rothmans, Benson and Hedges Inc. and
JTI-Macdonald Corp.). For the purposes of the study, illegal cigarettes were
defined as cigarettes/tobacco manufactured and sold by individuals who are not
paying appropriate government taxes and duty.